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In psychiatry, decompensation is the deterioration of mental health in a patient with previously well managed psychological problems, leading to a diminished ability to think and carry on daily activities.

Decompensation is the functional deterioration of a previously working structure or system. Decompensation may occur due to fatigue, stress, illness, or old age. When a system is "compensated", it is able to function despite stressors or defects. Decompensation describes an inability to compensate for these deficiencies. It is a general term commonly used in medicine to describe a variety of situations.

For example, cardiac decompensation may refer to the failure of the heart to maintain adequate blood circulation, after long-standing (previously compensated) vascular disease (see heart failure). It may also show other signs such as poor feeding, dyspnoea, hepatomegaly, engorged neck veins and increase in pulse rate.